The simple answer here is to seek the advice of a franchise consultant approved by the Romanian Franchise Association. A good consultant will conduct a thorough analysis of the feasibility of the franchise and provide you with an honest opinion regarding the findings.

 

How to Proceed

To proceed, you need to evaluate what exactly has made your current business successful and how that success could be achieved in different geographical areas, not just by you.

If the business relies on skills that are unique to you, how could someone else replicate what you have done without those skills? If the business offers a product or service specific to the area in which you operate, it needs to be determined if there is a real market for it elsewhere. Some successful businesses have failed as franchises in new markets simply because they didn't fit.

Things to Consider

Among the aspects to consider is ensuring that the business will stand the test of time. If the business is considered just a whim, how can you offer franchisees the certainty that they can develop their business for at least 5 years, as stipulated in the franchise agreement?

The best advice is to use all available sources of information and expertise in the franchise field and not try to cut corners. Franchising means building a successful long-term network – that's where the real value lies. Invest in establishing solid foundations for creating a strong franchise brand that attracts and retains the best people.

A Business That Can Be Franchised Should Be:

In summary, not every business is suitable for franchising, but most business concepts are.

A business that can be franchised should be:

  • credible - your concept must be proven with a good track record and an experienced management team. It must have good local press and public acclaim.
  • profitable - franchising is not a means to save a poorly performing business; a business must already be successful and generate sufficient gross profit margin to allow you and your franchisees to make money.
  • unique – your business must have a unique selling point that allows it to be differentiated from competitors. This sustainable competitive advantage would enable it to compete successfully in its market nationally, with potential for international expansion.
  • transferable – you must have a business in which systems, procedures, expertise, skills, and know-how can be transferred to others.
  • teachable – you must ensure that all systems are in place and that the operational systems of the concept are documented in manual form. You should also be able to train others in three months or less in the use of your systems and procedures.
  • supportive – you must have or be able to acquire the capability to provide ongoing support to your franchisees.
  • affordable – if the franchise is very expensive, very few people will be able to afford to buy into your network.

https://francizare.ro

 

If you want to learn more about franchising your business, click here to contact an accredited consultant

For an established and profitable company, franchising as a business format can be an extremely efficient path to expansion. What it won't do, is help a struggling business to return to profitability with someone else's money.

It is a common belief among successful franchisors that a franchisee is more committed to achieving business success than a salaried manager, because of their vested interest in making the business a success. There are several reasons for this view. A franchisee will be chosen to apply for your franchise from hundreds available and effectively commits to a minimum 5-year engagement with you.

The recruitment selection process should often be much more rigorous than that of a manager, so the caliber of a franchisee should be extremely high. They have invested in your model with a blend of their own money and bank finance and will only profit if they succeed in business.

With all this and much more at stake, provided your selection strategies are sound, franchisees should be recruited and chosen by you. the best chance of success on any "qualified" territory.

If you want to learn more about franchising your business, click here to contact an accredited consultant

There is a real opportunity when developing a business through franchising - you can expand more quickly, you can grow without needing new equity capital invested by you or co-directors, and of course, you can have local presence committed throughout the country in a way that managers and recruited staff whose long-term commitment to the business is never as strong as that of an owner.

But how do you know if your business can be franchised?

1. Differentiation - Do you have a distinctive product or service, or perhaps a unique marketing strategy or a clever way to reduce investment costs? Are you good at what you do? If yes, then others will be interested too.

 

2. Credibility -   Your company must be credible in the eyes of potential franchisees if they are to spend their money on a franchise. Credibility can be demonstrated in several ways - the most important of which is that the brand has success and a good management team behind it that potential franchisees can believe in.

3. Market Trends and Conditions - Are you in a long-term market that is stable or growing?

4. Successful Pilot Operations - Is your business actively trading and making money? It is not possible to successfully franchise an idea - you could spend money trying, but it would not be a good investment decision!

5. Transferability of Knowledge - Can you teach people in a reasonable amount of time to operate and replicate your business model? If it's a brain operation and it will take 6 years, then the franchisee is very unlikely to come on board, as they would need huge capital behind them to keep body and soul together while learning how to operate the business. McDonald's, for example, requires a long-term commitment to training and, while fully justified with this business operation, many new franchisors cannot ask for the same commitment. In short, can you provide people with the tools they need to get the job done in a period, for example, of four weeks?

6. Documented Systems - Does your business have methods and processes that are documented and can be used by third parties? Ideally, all policies, procedures, systems, forms, and business practices can be brought together in the Franchise Operations Manual, which becomes the model and foundation of the business you offer to the franchisee. It's okay if you don't have all these things yet as long as we can develop them for you.

7. Accessibility and Profitability of Investment - A franchised business must be accessible to its potential franchisees and profitable for both the franchisor and the franchisee. Additionally, the franchise must offer sufficient profit after payment of fees to the franchisor for the franchisees to achieve a reasonable return on their investment of time and money. This profitability is relative and should be measured against the investment to provide a meaningful figure, with franchisees achieving a significant return on investment by the third year of trading.

8. Commitment Successful franchisors are committed to building long-term relationships with their franchisees, which are mutually rewarding. There is a strong link between the strength of these relationships and the profitability of the franchise. Strong relationships with franchisees allow the franchisor to sell their franchises more effectively, introduce the necessary changes to the system more easily, and motivate franchisees to provide a consistent level of service to their customers.

9. Management Strength - The most common factors contributing to the failure of start-up franchisors are lack of personnel and lack of management experience. New franchisors often try to do everything themselves, taking on roles in which they have little or no experience. Consider how you will meet the resource requirements that franchising will bring, such as marketing in the franchise, managing potential customers, franchise sales, training and managing multiple operations, and building a strong team to support you.

10. Capital Franchising is a relatively inexpensive way to expand a business, but it is certainly not a "no-cost" option. A franchisor needs capital and resources to implement a franchise development program and recruit franchisees. Additionally, adequate funding should be available to support the growing franchise network, especially in the early years. If you have considered the 10 essential elements of franchising, do you think you can, support, tick most of them, then take the next step and get in touch. We need to help you - that's how we can both do good business and build a long-term relationship.